YouTube, Google+, and advertisements

12 November 2013

Disclaimer

This post is highly and irresponsibly speculative, and is written from the perspective of someone who is looking from the outside. So treat it with more than a pinch of salt, or as ravings of a tinfoil-hatted madman.

Google+ comments platform has been integrated into YouTube, and as could be expected from the fiery users of YouTube, there has been a huge uproar, expressed in a very straight, uncompromising language. However they may dislike this improvement, there is no turning back, and as creators will need a Google+ entity, be it a Google+ profile representing a person, or a Google+ page representing a non-person entity such as a YouTube channel, in order to respond to comments on YouTube, they are essentially forced into creating Google+ presence. This should not have come as a surprise, since Google+ has been encroaching into various Google products and services, and making a Google+ profile or a Google+ page a requirement for using Google products and services. This is the case with reviews on what is now Google+ Local and also for Google Play, and Picasa Web Albums have been more or less absorbed into Google+ Photos. Each time, there were strong voices of anger that their products were being usurped by Google+. Yet the Google+ steamroller rolls on.

Those who are very vocal may not comprise such a huge proportion of the YouTube user base, but it should have been foreseeable that there would be strong opposition. Why do it? Yes, it has to do with ridding of the excesses in nastiness that sometimes YouTube comments degenerate into, but part of the answer is probably to inflate the number of Google+ users: YouTube on its own has a huge amount of social interactions, as content is constantly created, consumed, shared, and commented on, and as such very useful in the war of user numbers. Combine the numbers of Google+ and YouTube users, and while there will be a lot of duplications, the resulting total will look more impressive in comparison to other competing networks. It is also a calculated risk: even if some YouTube users are so incensed to the extent of abandoning the platform, that would not constitute a particularly large proportion. Google is basically calling angry YouTube users’ bluff: most of them won’t leave YouTube, however much they may huff and puff, it will be all talk and no walk, and Google probably reckons that the malcontent YouTube users will eventually start using – and in the distant future liking – Google+. Many YouTube users have spend a lot of time and effort, and made emotional investment in YouTube, as well as monetizing their videos, so leaving it has a pretty heavy price, and accepting Google+ may be easier and more feasible than leaving YouTube. Perhaps there is a market for a competitor to capitalize on many YouTube users’ discontent, but it remains to be seen if such a competitor will emerge.

My guess is that, in the end, this integration has to do with advertisements, as I believe Google+ is essentially a tool for Google to build a better personal profile to target advertisements on the web including YouTube. Google is an enterprise, which makes money, and judged by the markets on how much it makes, and how much it is likely to make. Google generates the vast majority of its revenue from advertisements. Take the third quarter of 2013 for example, 91.1% of the total consolidated revenue was generated through advertisements (68.2% of the total consolidated revenue was on Google websites, and 22.9% on Google Network Members’ websites). Whatever Google does or wants to do or can do depends on the continuing success of its AdWords advertising platform, and while there will be other sources of revenue, advertisements will in all probabilities remain the main stream of revenue for Google for the foreseeable future.

Given this critical importance of advertising platform for Google, Google+ profile in my view enables Google to target people independent of device, identified individually, on accumulated data. Online advertisements used to be predominantly related to the content of the query or page, contextually determined and the importance was placed on understanding people’s needs and desires from and based on the context of the page, but more recently advertisers have started to track browsers across the web. You probably have noticed at some point that certain ads have been stalking you: they appear wherever you go, and even when the content of the page you are viewing is completely unrelated to the ads. Such targeting has been often pseudonymous, relying on browser cookies, so clearing the cookies often put a stop to such tracking and targeting. Also, if more than one person uses the same computer and the same browser, then ad targeting becomes confused, as it does not know that it is tracking two (or more) different people’s behaviour. Instead of tracking people very indirectly by their browsers, Google can track what people do, like, engage with, or are connected to on Google+ with the users’ consent. Once users sign in to a Google product or service, they are signed in to their Google+ account. Google does not have to rely on browser history, or track users pseudonymously, it knows the individual, insofar as that individual is represented by the Google+ profile, whichever device he or she may be on, and it can retrieve the Google+ profile with all the historical data, which acts as a basis for serving individually targeted advertisements.

Actions on Google+ will add to the data Google has on the individual as tied to and represented by the Google+ profile. Each action on Google+ from +1ing a YT video or an image to adding profiles and pages to circles is a useful piece of information that contributes towards a better understanding of the individual represented in the Google+ profile. So for example and to put it simplistically, favourable reviews and +1s would be interpreted as positive evaluation of the thing reviewed or +1d: based on aggregate data of people who positively reviewed or +1d the same or similar things, Google will have a pretty good idea, given sufficient information, what other things you are likely to like or prefer, in a similar way to how Amazon recommends other products, but on a far grander scale and in a far more nuanced and detailed manner. Google thrives on data where others may drown, and the more data it has, the better the ad targeting will be: Google is probably peerless in its ability to make sense of data. From the sheer amount of data, both in terms of the number of users as well as the depth or the quality with reference to individuals, Google – I speculate – has a pretty good ability to pigeonhole people into different targetable demographics.

To put the preceding paragraphs in another way: there were two related trends that made it more or less necessary for Google to come up with Google+. The social turn of the web, and an increased scrutiny and public awareness of tracking people’s behaviour online. The first could be explained by the phenomenal success of Facebook. Even if Google+ is growing at a faster pace than Facebook, there is no denying that it is still playing catch up. The second is demonstrated by the pop-up visitors see whenever they visit websites based in the European Union informing them that the site uses cookies to track their behaviour. In other words, there was a limit to what Google could do in terms of targeting ads, if it had stuck to matching ads to the context of the search results or the web page, or tracking people’s behaviour pseudonymously, even if they have been and will remain portent. I think it can be safely stated that our decision-making process in purchasing something is very complex, and it takes into consideration many aspects, such as the perceived trustworthiness of the vendor and the quality of the product or service, as well as recommendations from other people in the social nexuses, and not just the price. Such social nexuses and information cannot be gleaned from the context of the content, or from browser history. Facebook has accumulated a huge amount of information on these social nexuses, even if it is often inept at targeting appropriate ads, to which Google does not have access. The best way for Google to secure this kind of information was not to pay for such or form a partnership with another company, but create its own, and Google+ is such. The combination of identifying the person’s preferences and social nexuses through Google+, behavioural tracking, and contextual targeting represents a very powerful ad targeting.

To its credit, in my opinion Google is extremely transparent as regards what information it uses in which products to target whom with which kinds of ads compared to most other companies: if you have a Google account, it is worth going to www.google.com/settings/ads to see what information it has, and where it is used, on Google properties, or on the wider net. The recently revised (dated 24 June 2013), and often reviled, Google Privacy Policy (www.google.com/policies/privacy/) makes it clear how Google proposes to use information it collects in a crisp and clear language. The relevant passages are the following. We use the information we collect from all of our services to provide, maintain, protect and improve them, to develop new ones, and to protect Google and our users. We also use this information to offer you tailored content – like giving you more relevant search results and ads. [...] We may combine personal information from one service with information, including personal information, from other Google services – for example to make it easier to share things with people you know. We will not combine DoubleClick cookie information with personally identifiable information unless we have your opt-in consent. As I read these passages, the first section refers to targeting people individually across Google entities seamlessly from search to YouTube, and the second refers to ad targeting on Google and elsewhere such as AdSense-monetized sites through a combination the ad profile based on the cumulative Google+ activities and bahvioural tracking that occurs outside the Google+ landscape.

If I’m correct in my suppositions outlined above that Google+ is essentially about building an ad profile for each individual profile, is that acceptable? That is a personal evaluation that each user of Google products and services will have to make on his or her own terms. Giving personal information so that Google can target us with advertisements that is more likely to generate revenue is the quid pro quo for the products and services it provides us mostly for free. Google gives us the option to opt out of interest-based ads quite easily. For that reason, I am willing to engage in that exchange, but as I verge towards the tinfoil-hatted end of the spectrum, I tend not to +1 things that much (at least not on external sites), and I do not comment on YouTube or submit reviews of local businesses. At the same time, I am aware that really personal thoughts and correspondence are of little use to Google, since such information is unlikely to be valuable in terms of ad targeting. Google is far too busy to be interested in my life and I am so insignificant, and it would surely be a sign of madness or delusion of self-importance if I were to think seriously, somehow, that Google as if a sentient being is interested in me as a person as opposed to merely one target out of millions if not billions to show ads. And anyway, I trust Google as a corporation: after all, it holds records of my life for the past few years, and it has more information about me than any other organization or person.

Whether you or I like it or not, Google+ will become increasingly central to using most Google products and services, because it is central to Google’s core business of serving ads.